Japanese technology stocks rally

CBS.MarketWatch.com

American technology stocks aren't the only ones on a tear as the performance on Tuesday of Japanese tech issues showed. Sony rose by 5 percent after announcing a stock split, Hitachi surged 12 percent after striking a deal with a Taiwanese chipmaker and NEC gained 7.6 percent after disclosing a plan to almost double its chip sales.

Sony, a Tokyo-based consumer electronics and entertainment company
SNE, +0.82%
rose by 12 3/4 to 267 1/2 on volume of 646,000, or more than three times its 50-day daily average.

Sony will split its stock2 for 1, to take effect on May 19 for shareholders of record on March 31.

Hitachi, UMC to jointly produce wafers

Hitachi, a Tokyo-based electronics company, will form a joint venture company with Taiwan's United Microelectronics Corp. to make next-generation wafers in Japan. Manufacturing is slated to start in 2001.

Half of the wafers produced will be reserved for Hitachi products, the rest will go to UMC's foundry clients. The venture will allow the two companies to reduce initial investment costs. Hitachi said the semiconductor market is expected to grow due to increased demand for electronic devices such as PCs, cell phones and digital consumer products. Hitachi's
HIT, +0.00%
ADRs rose by 16 15/16 to 157 15/16.

Separately, Hitachi also disclosed that it's merging three subsidiaries -- Hitachi System Engineering Ltd., Hitachi Seibu Software Ltd. and Hitachi Chubu Software Ltd. -- to create Hitachi System and Service Ltd. to provide business services and support. A spokesman for Hitachi said the three units provide similar services to financial institutions and manufacturers. The consolidation, which is expected to be completed by April 1 and yield 78 billion yen ($762 million) in yearly revenue, is part of Hitachi's ongoing program to streamline operations.

NEC plans to almost double LSI chip sales

NEC Corp., an electronics company and Japan's largest semiconductor maker, plans to increase sales of its system LSI chips to 150 billion yen a year by 2003, up from 80 billion yen today, according to the Japanese newspaper Nihon Keizai Shimbun. NEC
"
will spend an extra 15 billion yen by spring to expand production at its factories. Tokyo-based NEC's ADRs rose by 8 to 113.

PSINet said Tuesday that Microsoft's WebTV Networks will increase its customer commitment to the company by four-fold. WebTV Networks, which provides Internet services through the television set, uses PSINet's dial-up service to get their customers online. In the expanded agreement, WebTV will commit to delivering four times as many customers as the current number. PSINet is an e-commerce company and Internet service provider.

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